real estate Coach

I know.  It seems like an oxymoron.

• Necessary and attorney
• Reasons For an attorney

All in the same sentence.

Very scarry and I hope you haven’t stopped reading because you think I’m on drugs or something.  I’m not, really.  And it’s too early for a glass of dry red wine.

However, it is 5 o’clock….nevermind.

Back to the attorney thing.  I actually met one who might be worth his weight in gold.  Wait before you doubt me.

He represents homeowners who are losing their house.  He actually goes to court and represents them when necessary.  He does loan mods for them.

He does seem to understand that HAFA and HAMP is a bad idea

The cool thing was he had a great idea to confirm no deficiency jusdgement after the sale almost no matter what the acceptance letter said.

On attorney letterhead, have the attorney write back to the bank that twe are confirming their belief to this letter means the bank will revmove the lien from the property and not now or ever come after the homeowner the unpaid balance of the loan.  That this letter says paid in full and no more money is due ever on this loan.

OK, see why an attorney should write it?  It needs to be in legal ease – but the point is, if the bank doesn’t respond and say oh no that’s not what we meant, it is a binding contract.  And you take the signed copy (signed by the homeowner) and record it with all the closing docs.  Deed, etc.  So it is there for future debt collectors to see!

See, an attorney who gets it!

For $200 he’ll do a document review making sure everything isin place and write this letter to the bank.

This makes an attorney (one who gets it, of course) an important part of your team.

Call me, I’ll share his name and number!

Deb McMillan

The Short Sale Queen® and Coach

Always looking for better, smarter ways to get short sales done better!

www.shortsalequeen.com

I keep hearing what a good thing it is that the banks have paid back the TARP money to the government.

That they are right again with the public and tax payers and all isrithgt with the world.

It just has felt wrong some how but I didn’t know enough to talk about it.

I have learned a little more.  Did you know that once the banks pay back all the TARP money they have borrowed from the government, they now get tax credits on each short sale or loan mod and maybe foreclosure that they do?  The get a tax credit for the amount of debt they forgive to the homeowner.

Therefore, the HAFA program that I wrote about last, the 2nd and additional lien holders are “supposed” to forgive the homeowner of the  unpaid balance and not go after them for the difference.  However, the first declaries it doesn’t and won’t have time to “ensure” they don’t pursue the homeowner so if the homeowner doesn’t get something FIRM in writing, those additional lien holders CAN and most like will go after them for the unpaid balance.

Even though they get a tax credit from the government.

No wonder they paid off err, I mean paid back the government so quikcly.

What do you think about all this?

Deb McMillan

The Short Sale Queen® and Coach

www.shortsalequeen.com

I have been reviewing the HAFA program since it’s becoming more apparent that the banks want to have the homeowners enrolled in the program.

Have you looked at it?  It doesn’t look like a good deal at all to me.  Yes, not a good deal for the homeowners is what I mean.

The property has to be their personal home.  That’s normal.  But they must also still be living in it.  It is also very possible they may have to be making payments to the bank during the 120 days they give the homeowner to find a buyer on a short sale for a set purchase price the bank has per-determined.

UGH!  That who paragraph sounds like a lot of  “ifs” and a bad deal to me.

Also, when the homeowner signs up for the HAFA program, yest there is an Opt In Form, they agree to do a Deed-In-Lieu in 4 months (120 days) if the house doesn’t receive the desired short sale offer.

Does that stink?  In today’s market I’m guessing that the bank will price the house higher than it will really sell for.  And with the First Time Home buyers Credit gone, buyers are looking for deals.  So if the bank is pricing the houses high – no buyers will appear and the homeowner will automatically get a DIL on their credit.

OUCH.  That doesn’t look or feel near as good as a short sale or as easy to recover from.  Good job HAFA.  Really helping the homeowner.

We talk about all this and more on my weekly coaching call with short sale students all across the country.  You should be on there too!

Log on and learn more at www.shortsalequeen.com

That’s all for now

Deb McMillan

The Short Sale Queen® and Coach

What did Military Hero’s Give up?

All of their tomorrow’s so our today’s we can spend free.

Hug a vet and say a prayer for all of those who have given their life for our freedom.

Deb

Freddie Mac and Short Payoff Fraud

Freddie is at it again and hopefully the other government agencies will NOT follow suit.

On Friday, April 16, 2010, in a Freddie Mac newsletter, a Freddie Mac investigator wrote an article accusing A-B B-C (double closes)  – the kind we’ve been doing and I’ve been teaching and am proud to teach because it is Disclosure, Disclosure, Disclosure – of being fraud.

They are stating that if they are not told there is another offer on the property at a higher price – that constitutes fraud.

They also state if the seller is walking away from the house and they really can afford to make the payments – that is fraud.

Realtors, of course, are believing that any same day double close is now fraudulent – because it gets the investors out of the way.

Current Business
In the Option Contracts we have been using for over 2 years, we have always used DISCLOSURE.  It has always been included.  That was their purpose.  That was the reason they were used in the first place was to tell all parties exactly what was taking place in the transaction.

The problem was the short sale lender had to read the contract.

The days of buying short sales through a Trust which didn’t have any language in it about ‘reselling the property for a profit” were changed for this exact reason.

Transactional lenders  (borrowing money for 1 day to fund separately the first transaction) so the C buyer’s cash paid NOTHING toward the first transaction – were created.

Many steps were taken to avoid the accusation of Fraud.

Even on February 1, 2010, FHA WAIVED the 90 day seasoning rule.  So they must have seen many buyers/investors were doing ligitmate transactions, helped the economy, and made it a little bit easier to close deals and keep houses from being empty and going through foreclosure.

Does this investigator really speak for all of Freddie Mac?

Ya – unfortunately he probably does.  I won’t be so naive as to think they don’t want more money for their agency and to remove the bad name on their head either.

Will they issue something else to counteract this newsletter?  I sure hope so.

Let’s look at Attachment A from Freddie – an official statement.  “Best Practices for Loans involving Possible property Flips”

Paragraph 2 “Property flips are not inherently illegal and not all transactions involving a rapid purchase and resale are improper.  Legitimate property flips are acceptable transactions that may be legitimate include:

Point #5  Sale of properties that the property seller acquired at or below market value after purchasing as a result of a distress sale (i.e. REO sale, short sale, tax lien sale, bankruptcy trustee’s sale, etc), where any increase in the sales price over the property seller’s acquisition cost can be clearly shown to be a result of the difference (if any) in the market’s reaction to distress sales and typical arms-length market sales”

That being said, when people/buyers hear that the house is in foreclosure, don’t they want to buy it at a DEEP discount?  Once it is out of foreclosure, bankruptcy, etc. it’s value increases because the “distressed” situation has been resolved.  That is the market reaction!  We can sell it for more.

The banks do see the contract – whether they read it or not.  However, they can see when the “B” buyer is a “LLC” it says an investor is buying the property and most likely reselling.  (not enough for Disclosure – but certainly a clue what will happen with the property after closing.  Banks have even told me this!

So what is the solution?

Stay tuned for the next Blog.  I don’t want to bore you now and you stop reading!  For more tips Click here!

Deb McMillan

The Short Sale Queen and Coach

www.shortsalequeen.com for more in coaching and the latest on the goofyness of the feds and the Solutions!